Letter to my Readers – my Vrijheid Fonds in review 2017

Thanks for stopping by and taking the time to read my letter to you. This year my year-letter to you is a little bit different than you are used to. This year I’ll split my letter in two different posts. In the first post, I will give a review of my Vrijheid Fonds, and in the other post, I will tell you about my site: Polliesdividend.com

Why do I do a year review, you ask? Well there are actually a couple of reasons (besides because its fun to write). By doing my own review periodically it will help me understand whether I’m on course to meeting my goals, or whether I need to change my strategy or tactics.

It also helps me to stay focused on actively managing my Vrijheid Fonds. And I believe it helps me, through reflecting on the past, to be a better DGI.

If I look back at 2017, I can say that 2017 was a good year for my Vrijheid Fonds. And personally I look back at a great year!

Top 5 financial news in 2017

Let’s review some of the biggest financial news from 2017.

Amazon: Amazon bought Whole foods and shocked the consumer discretionary markets. We saw a drop in stock prices for the big names in the consumer discretionary markets. My Vrijheid Fonds was also affected by this drop. Ahold Delhaize, Wal-Mart and Target lost a couple of percentages.

Stock and economy march on: Wall Street’s second-longest bull of almost 9 years generated a lot of money for the most of us. Not only the markets in North America did well, also Europe and Japan.

Bitcoin: Bitcoin, the biggest crypto currency, leaped into the public’s consciousness with a startling gain more than 1,700% in 2017.

Dollar vs Euro: The Dollars lost more than 12% against the Euro in 2017

Indexes: DJIA up 25%, Nasdaq up almost 19% and AEX up almost 13%.

Vrijheid Fonds

Now that we have the Top 5 Financial news of 2017, it is time to look at my Vrijheid Fonds (and how it was affected by this news). Lets start with some key statistics.

Some key statistics on my Vrijheid Fonds for 2017:

Net Value at the start of 2017: € 79,156

Net Value at the end of 2017: € 90,894

Fresh added new capital in 2017: € 7,193

With these numbers we can calculate the growth of my Vrijheid Fonds in 2017. In 2017 my return was (drumroll please!): 5.33%

Okay lets compare my return with the return of some major indices, you can see that my Vrijheid Fonds didn’t beat the indices this year. But I’m proud of a yield of 5.33%, this is way higher than I can get on my savings account.

And why, you ask, didn’t I beat the mayor indices? Well if we take a look at my Vrijheid Fonds, you can see I’m a little bit heavy in the consumer discretionary section. And precisely in this sector 2017 was a rough year, due to the Whole Foods take over by Amazon. In my Vrijheid Fonds AH.AS, ADM & TGT were all affected.

Furthermore GE slashed its dividend in half in 2017, and on this news the stock price of GE tanked. I think GE was the worst stock of DJI in 2017.

Consumer Discretionary

19,98%

Consumer Staples

20,74%

Energy

15,33%

Financials

3,92%

Health Care

5,77%

Industrials

0,96%

Information Tech

2,51%

Materials

1,26%

Telecommunications

3,57%

Utilities

2,21%

REIT

8,77%

Cash

1,82%

Mutual funds

13,17%

Total

100,00%

Sector allocation at 1/1/2018

Dividend

Beside 1 dividend cut, there was also some good news. There were 27 dividend increases in 2017 for in total 19 companies. The total amount of dividend I received in 2017 was € 3,081.16.

My dividend income for 2017 showed an increase of more than 0.06% from previous year, this is including the super dividend from Ahold I received in 2016. To compare my passive income from 2017 with 2016, I have to remove this super dividend from the equation. And then I have an increase 21,23%

Dividend

Q1

Q2

Q3

Q4

Total

2014

90.11

509.38

226.04

289.32

1,114.85

2015

323.04

634.43

401.28

414.83

1,773.58

2016

511.80

769.88

1,148.63

649.08

3,079.38

2017

673.10

923.18

726.82

758.06

3,081.16

I’m proud of this very nice increase! It is a great starting position for 2018.

Positions

At the end of 2017, I have 23 stocks in my Vrijheid Fonds and 3 mutual funds. I didn’t sell any stock of mutual fund in 2017. And with the fresh capital I donated every month, I did make some new buys.

I started the year by buying 55 Rabobank Certificates. For more information take a look at my post: Recent Buy – Rabobank Certificates. And then in February I bought 15 stocks of JNJ. For more information about this buy click New Buy JNJ. In April I averaged down on my already existing position of TGT when I bought 34 stocks of TGT.

In July I initiated a position in SO after a stock analysis Pollie-style. I bought 50 stocks. In October I made two new purchases. First I bought 40 stocks of T. I couldn’t resist the high yield and low pricing back then J And at the end of the same month, after a quick analysis I bought 35 stocks of O.

Furthermore I received 22 new stocks of RDS-A and 4 stocks of UN by dripping my dividends. And every month I bought at least for € 100 some new Mutual Funds for my “Safe-haven-sleep-well” part of my Vrijheid Fonds.

In the table below you can see the YoY stock price changes for every individual stock of my Vrijheid Fonds.

Ahold Delhaize

-8.46%

Royal Dutch Shell

6.93%

Unilever

20.04%

AFLAC

26.17%

Archer-Daniels-Midland

-12.14%

AT&T

-8.59%

Billiton PLC – ADR

28.23%

Chevron

6.46%

Coca Cola

10.82%

Franklin Resources

9.58%

General Electric

-44.74%

Johnson&Johnson

21.20%

McDonalds

41.47%

Microsoft

37.55%

Omega Healthcare Investment

-11.84%

Procter & Gamble

9.31%

Realty Income

-0.80%

South 32 LTD

50.28%

Southern Company

-2.20%

Target

-9.67%

Vereit

-11.60%

Wal-Mart

43.16%

NN Euro Obligatie Fonds – Mutual Fund

-6.39%

NN premium Dividend fonds – Mutual Fund

10.75%

Kempen European High Dividend Fund – Mutual Fund

6.42%

Rabobank Certificates

8.68%

The Dollar

In the beginning of this post I shared the Top 5 financial news in 2017. One of the entries of this Top 5 is the Dollar. The Dollar lost strength against the Euro in 2017. The Dollar lost more than 12% against the Euro.

Because more than 52% of my Vrijheid Fonds consist of US stocks, you can image that the value of my portfolio is affected by a weaker Dollar. But I always look at the bright side of live, my buying power has increased because I can get more Dollars for every Euro 😉 .

And if we take a look at my companies, we see a lot of companies that earn their money outside the US. So a lower value of the Dollar makes it cheaper for them to export their products. And by doing that, hopefully make more profit.

But hey, this is just a blog post from a normal European guy, with no professional financial education. So what do I know! I’m not an expert. But I see it is affecting my Vrijheid Fonds, in a positive and negative way.

Conclusion

2017 has been a good year. I made some good buys and expanded my passive income. The value of the Dollar, of course, affects my portfolio, but also give some nice opportunities. If I stay focused and keep investing in 2018 I will come closer to my end goal of FIRE.

That is quite the impact from the USD on your portfolio, Considering you are still building up your wealth and are not in the withdrawal phase, it’s not a big deal really. It could also flip again the other way around. Any idea how you are going to capture this exchange rate risk in terms of cash-flow from your dividend stocks?

I agree, that during the building phase it is not a big deal. But during the withdrawal phase? I don’t know yet. It depends on the net value of my Vrijheid Fonds at that moment. I think it will not be a problem, but I will look into it (have some time left 😀)

Yes, the Dollar / Euro conversion affects all of us here in Europe. Well, those with stocks in the US at least. But who cares. It goes up and it goes down. Sometimes it helps you, sometimes it doesn’t. In the end it will average out. And if you have 5% growth with the 12% devaluation included, then you did very very well. 🙂

just for the fun, I calculated my return of 2017 when the value of the dollar at the end of 2017 was the same as in the beginning of 2017.
My return would be 11.63%
So P2F I agree with you that my Vrijheid Fonds dit very very well.
Thank you for pointing this out!

Pollie

I’m a 40-something old guy from The Netherlands, aka Pollie.
I have a family with two little kids, a day job, a house with a garden and this blog to keep me busy. So not much different from you; an investor with a busy life with limited time to trade.
I want to share my journey to hopefully inspire others and also to track my progress towards my ultimate goal of financial independence.
Pollie@polliesdividend.com